On Quest for a Digital Renaissance - Tag - StrategyThis blog is about a Second digital Renaissance. Economics, security, basic innovation processes etc. needs to be revisited in the light of digital networking to incorporate re-empowerment of citizens and designing-in resilience and re-creating the drivers of progress of society.2018-03-15T12:25:52+01:00Stephan Engbergurn:md5:41096DotclearStop leaking your Digital Assetsurn:md5:60df4c8e898663534ebbd2036aec70b82014-08-12T11:15:00+02:00Stephan EngbergCorporateCRMData SecurityGrowthStrategy <h2>Leaking customer data is bleeding profits</h2>
<p>Most companies are very aware of the two traditional elements of Customer
Loyalty focusing on sales (get and grow), but underestimating the third
increasingly more vital aspect of customers leaving (keep).</p>
<ol>
<li>Get - Customer Acquisition</li>
<li>Grow - Customer up-selling or cross-selling</li>
<li>Keep - Customer Retention</li>
</ol>
<p>The reason is very simple. The cost of customer acquisition are in the
accounts but excused by the sales value whereas the cost of customer leaving is
a loss of revenue not recorded in the accounts as neither cost nor lost
revenue. Sales are therefore constantly repeating the same mistake overspending
on marketing and outbound selling while massively underspending on protecting
customer relationships.</p>
<h3>Are you feeding your customers to your competitors?</h3>
<p>Google, Facebook and the other profiling engines make their money from
making your customers defect.</p>
<p>Whenever you leak data on your prospects or customer interactions with you,
you are not only helping your competitors target your best customers, you are
also telling the marketing profilers how best to make your customers
defect.</p>
<p>For instance, when marketing use Google Analytics to collect data on who
visit your website and what they look at - that information go straight to
competitors targeting your customers - every bit of information is
automatically qualifying the targets and how to convert these - for the sake of
Google Earnings.</p>
<p>Similar, when marketing mistake number of &quot;Likes&quot; on Facebook for loyalty
and strength of customer relations, they are forgetting, that like are resold
by Facebook to competitors and you increasingly have to pay Facebook to prmote
you to you own customers as &quot;Like&quot; does not mean they see what you try to
communicate.</p>
<p>The outcome is a negative spiral of growing marketing costs, market
distortion and resources diverted from value creation to moving, trading and
shouting to customers..</p>
<p><strong>Do you have a strategy and means to prevent leaking customer data
from happening?</strong></p>
<p>Notice that this is pure strategy and mission critical analysis. That is
even before we address other aspects of customer data leakage such as the lack
of legality (e.g. EU Data Regulation), threats created towards customers
(Identity theft etc.) and the accumulating consumer distrust from providing you
with data.</p>
<p>Try making this simple check: Whenever your customer load a page from your
website, do YOUR website trigger a connection to Google, Facebook or other
customer profilers? I am not only talking about Google analytics, but any of
the many ways the profilers try to get you to link to them and feed their
profiling whether we talk &quot;Like&quot;.</p>
<p>If so - you have just discovered the biggest drain on your bottom-line
profit and need to act urgently on this! Pushing new customers and marketing
resources to get or grow customers, when they are poring out in the other end.
You need to plug the hole!</p>
<h3>Are you feeding your future competitors through your choice of service
providers?</h3>
<p>All are suffering from the problem of leaking customers pushing price
competition,</p>
<p>But huge industries are suffering even worse - consider media, telcos,
payments, digital service etc. They all suffer from virtual infrastructure
trying to take control of their customers and pushing themselves in front of
the value chains.</p>
<p>What starts as a problem of growing marketing costs, customer churn (fast
turnover) and over-communicating pressuring bottom-line in an industry turns
into something much worse in terms of bleeding profits - commoditization were
you loose the connection and direct relation to individualize services and
possibility of differentiation - as the winner-takes-all engines are growing
and getting more and more aggressive as they turn into virtual supermarkets
owning the customers with you providing the product and service while they take
the profits.</p>
<p>Consider your service providers - id, payments, communication, search,
supply chain etc. - what are their business models? Are they in the business of
leveraged network effects, i.e. to put themselves in the center of a spiders
web were everybody else are feeding them data while they increasingly profit
from controlling market making or creating lock-in effect based on the control
of your customer data?</p>
<p>Are you doing something as simple as letting them control your security
(log-in), communications channels or unsecured data? Do you depend on them for
communicating with existing or potential customers?</p>
<p>if so - you have just discovered your biggest strategic problem and future
drain on you bottom-line profit!</p>
<p>Your business model is unsustainable as your are being intermediated and are
yourself training your future competitors on how to reduce you to a
commodity-player with a rapidly growing pressure on profit margins.</p>
<p><strong>Do you have a strategy and means to maintain control of your
connections with customers?</strong></p>
<h3>Any other problem is secondary to dealing with the two above problems.</h3>
<p>If you do not understand and have a clear strategy on dealing with these two
aspects, your business is under attack due to your own neglect.</p>
<p>You can design new products, you can poor marketing costs into the
operations, you can create great technology - but if you are not able to
protect your customers, your business model are leaking.and your future profit
under serious attack.</p>
<p>If you</p>
<ol>
<li>do not understand the problems, get help - because you are most likely
suffering from these.</li>
<li>do not know whether you suffer from these problems, buy the analysis - as
you are working in the blind.</li>
<li>know, you suffer but don´t know what to do, get help for the workshops and
training - as your strategy is omitting the key components.</li>
<li>know what to do, but lack the skills to do it, get the expertise - as the
devil is in the detail.</li>
<li>are suffering from unfair competition, get the help to document and inform
government authorities - as the lobby of the winner-takes-all players are
extremely powerful and politicians and bureaucrats have no idea of the kind of
problems, you are facing.</li>
</ol>
<p>Protect your customer data from leaking, control your connection with
customers and do not let unfair competition from winner-takes-all virtual
infrastructure erode your market.</p>